Q. 3 A company produces and sells a single product. Cost data are as follows: Variable costs per unit: Direct materials TK 10 Direct labour 9 Variable factory overhead 8 Variable selling and administrative 4 Total variable costs per unit TK 31 Fixed costs per year Fixed factory overhead Fixed selling and administrative Total fixed costs per year TK 600,000/- 580,000/- TK 1180,000/- Page 1 of 2 The product sells for TK 80/- per unit. 50,000 units are produced and 60,000 units are sold during the year. Beginning inventory of the product is 25,000 units. Product cost per unit under absorption and variable costing in the previous year was the same as in the current year. Required: a) Determine unit product cost under absorption costing and variable costing b) Prepare income statement for the year under absorption costing and variable costing c) Reconcile the absorption costing and variable costing net income. Marks: (2 +4+4)= 10